---
title: "Korea’s STEM Talent Challenge: Fixing Incentives for Deployability"
summary: |-
  South Korea produces large numbers of STEM graduates, but too many are attracted to medicine, and too few go into engineering. Korea should rebalance its education financing and university incentives to ensure that enough engineers are ready to work in advanced industries.
date: "2026-06-08"
issues: ["Skills and Future of Work", "National Competitiveness"]
authors: ["Robert D. Atkinson", "Sejin Kim"]
content_type: "Reports & Briefings"
canonical_url: "https://itif.org/publications/2026/06/08/koreas-stem-talent-challenge-fixing-incentives-for-deployability/"
---

# Korea’s STEM Talent Challenge: Fixing Incentives for Deployability

## Key Takeaways

- Korea’s STEM challenge is not a pipeline shortage but a deployability gap. The country produces large numbers of graduates, yet firms still struggle to hire engineers and computing specialists who can contribute immediately to advanced industrial work.
- Korea’s incentive structure favors medicine over engineering. Protected medical licensing, stable earnings, and regulated tuition create predictable returns, whereas engineering involves slower wage growth and greater early career uncertainty.
- Korea’s weak engineering ROI strengthens the case for reform. Compared with the United States, Korea offers weaker wage premiums, slower early career advancement, and fewer applied career pathways for engineers.
- Korea should reform professional tuition policy to rebalance talent investment by allowing differentiated tuition in high-return fields such as medicine, with mandatory reinvestment in engineering and applied science.
- Graduate education should be redesigned around deployability, not academic throughput. Korea should adapt Olin-style project training and Denmark’s Industrial PhD model to connect STEM training directly to industry needs.

# Introduction

South Korea does not lack STEM (science, technology, engineering, and math) graduates. It lacks deployable engineers and computing specialists capable of contributing immediately to advanced industrial systems. Each year, Korean universities produce large cohorts of science and engineering graduates, yet firms continue to report persistent cumulative shortages of job-ready technical talent. By 2029, Korea is projected to face a shortage of roughly 580,000 workers in advanced technology sectors, including artificial intelligence (AI), cloud computing, and semiconductor-related occupations.[1](#_edn1) This gap is not primarily the result of demographic decline or insufficient educational capacity. It reflects structural incentives embedded in Korea’s education and labor market institutions.

At the center of the problem is a misalignment between private educational incentives and national industrial priorities. Medical education operates under quota protections and regulated tuition ceilings that constrain tuition levels while preserving strong labor market returns. Engineering and computing fields operate under the opposite structure. Students face longer income uncertainty, weaker institutional signaling of long-term reward, and less-predictable employment pathways. Under these conditions, the migration of top students toward medicine is not a cultural anomaly but a rational economic response to institutional incentives.

The implication is clear. Korea’s STEM workforce challenge should not be treated primarily as a pipeline shortage. It should be treated as an institutional design problem. Expanding enrollment alone will not produce deployable engineers or computing specialists if underlying financial and organizational incentives continue to favor credential accumulation over workforce readiness. What is required is not incremental expansion but structural reform that links education financing, institutional organization, and workforce outcomes into a coherent deployment system.

This report proposes a coordinated national reform strategy built around explicit institutional responsibility:

- **The National Assembly should authorize differentiated tuition frameworks for high-return professional programs, including medicine, by amending relevant provisions of the Higher Education Act.** Current tuition structures treat programs with vastly different private returns in similar ways, despite large differences in expected lifetime earnings across fields.[2](#_edn2) Allowing controlled tuition differentiation would better align private educational returns with national workforce priorities while reducing cross-subsidization that currently distorts student choice.[3](#_edn3)

- **The Ministry of Education should implement a controlled medical tuition adjustment framework and legally earmark incremental tuition revenue for engineering and computing education capacity.** These resources should be directed toward fellowships for engineering and computing students, modernization of laboratories, and expansion of applied graduate training programs in sectors facing measurable labor shortages, including AI, semiconductors, aerospace systems, robotics, and advanced software engineering. Any tuition adjustments should be gradual, capped, and governed by transparent reinvestment rules to ensure that redistributed funds increase national technical capability rather than general institutional budgets.[4](#_edn4)

- **The Ministry of Economy and Finance should establish a protected STEM reinvestment fund to manage redistributed revenue from professional education adjustments.** This fund should finance doctoral fellowships, applied research infrastructure, and structured university–industry partnerships designed to produce graduates who transition directly into industrial roles. A central reference model is Denmark’s Industrial PhD system, under which doctoral candidates are formally employed by partner firms while simultaneously enrolled in university doctoral programs.[5](#_edn5) These candidates conduct research defined jointly by firms and universities, ensuring that doctoral work is directly tied to commercial and industrial applications. Evaluations of the Danish Industrial PhD program show that participants demonstrate stronger private-sector employment outcomes and higher retention in industry relative to traditional academic doctoral graduates.[6](#_edn6)

- **At the institutional level, Korea should complement financing reforms with structural redesign of graduate training models modeled on project-based engineering education systems such as those used at Olin College of Engineering in the United States.**[7](#_edn7) Olin integrates multidisciplinary design, entrepreneurship, and engineering education through required project-based coursework and industry-linked capstone experiences. Students complete real-world technical projects addressing externally defined engineering challenges, often in collaboration with firms or applied research partners. Evidence from project-based engineering systems indicates that embedding technical education within production-oriented environments significantly improves workforce readiness, interdisciplinary problem-solving capacity, and transition into engineering and technology roles. Korea should adapt these principles by establishing pilot graduate programs that combine Industrial PhD-style company engagement with Olin-style project-based technical deployment requirements.

- **Finally, the Ministry of Education, in coordination with the Ministry of Science and ICT, should convert a defined portion of university funding into outcome-based financing tied explicitly to employment placement in high-quality technical roles.** Public subsidies should depend in part on measurable outcomes, including graduate placement in designated strategic industries, verified completion of industry-led technical projects, and employer-reported workforce readiness indicators. At the national level, the Office of the President and the National AI Strategy Committee should publish annual deployability metrics across ministries to establish transparent accountability for workforce outcomes

Together, these reforms would shift Korea’s higher education system from an enrollment-driven model to a deployability-centered one. Countries that align financing mechanisms, institutional structures, and labor-market outcomes consistently produce graduates who transition directly into productive industrial roles. Korea possesses the educational scale, technical capability, and institutional capacity required to make this transition. What remains is the willingness to redesign incentives so that engineering and computing careers once again offer predictable, competitive, and innovation-oriented pathways for the country’s most capable students.

**Figure 1: Labor shortage rate in Korea’s 12 core industries, 2023[8](#_edn8)**

![image](https://itif-publications-production.s3.amazonaws.com/2026-korea-stem-challenge%20v10%20final%20HTML_files/image001.png)

In figure 1, note that the labor shortage rate is defined as the share of unfilled positions relative to total labor demand, calculated as follows:

![image](https://itif-publications-production.s3.amazonaws.com/2026-korea-stem-challenge%20v10%20final%20HTML_files/image002.png)

This metric captures the proportion of total required labor that firms are unable to fill at a given point in time.

**Figure 2: Forecast of workforce gap (supply/demand) in emerging technology fields, 2025–2029[9](#_edn9)**

![image](https://itif-publications-production.s3.amazonaws.com/2026-korea-stem-challenge%20v10%20final%20HTML_files/image003.png)

# Korea’s STEM Shortage Is a Deployability Problem, Not a Degree Problem

Korea’s doctoral pipeline is often cited as evidence of strong STEM capacity, but field-level data shows a more complex picture. In 2025, Korea produced 19,831 new PhD graduates, yet only a portion were trained in STEM-related disciplines. Among surveyed doctoral recipients, engineering accounted for 25.8 percent, natural sciences 12.5 percent, and information and communication technology (ICT) 5.0 percent, meaning that roughly 43 percent of new PhDs were trained in core technical STEM fields directly associated with engineering, applied science, and computing. By contrast, non-STEM fields such as arts and humanities (16.9 percent), business, administration, law (11.5 percent), and social sciences and journalism (5.2 percent), including political science-related disciplines, together represented a substantial share of total doctoral output.[10](#_edn10)

Employment outcomes further illustrate the structural mismatch between degree production and deployable technical capacity. Across all fields, 66.7 percent of new PhD graduates were employed, while 27.7 percent remained unemployed and 5.6 percent were economically inactive, indicating uneven early labor-market absorption. Employment rates also varied significantly by field. Health and welfare fields recorded the highest employment rate at 77.2 percent, followed by education (71.9 percent) and business, administration, and law (71.6 percent). In contrast, several technical fields associated with national industrial priorities reported weaker outcomes, including natural sciences, mathematics, and statistics (59.3 percent) and ICT (65.9 percent). These figures underscore that the challenge is not simply producing more engineers alone, but ensuring that engineers, applied scientists, and computing specialists transition efficiently into industry roles rather than remaining concentrated in academic or unstable employment pathways.²

> Employment outcomes illustrate the structural mismatch between degree production and deployable technical capacity.

Workplace distribution patterns reinforce this interpretation. Among employed PhD graduates, 39.6 percent worked in universities, compared with 21.0 percent in private-sector firms and 5.8 percent in public research institutes, indicating that a large share of highly trained talent remains concentrated in academic institutions instead of transitioning at expected rates into industry roles.

This institutional distribution helps explain persistent complaints from firms about shortages of job-ready engineers, software specialists, and technical researchers, despite the country’s high level of doctoral degree production.³

Taken together, this data clarifies that Korea’s STEM workforce challenge is not driven by a simple shortage of degrees. It reflects a structural imbalance in field composition, labor-market absorption, and institutional deployment pathways. Producing more PhDs, without shifting incentives toward engineering, applied science, and computing deployment, will continue to generate credentials faster than actual industrial capability.

This pattern reflects a structural disconnect between education output and industrial demand. Korea maintains one of the highest research and development (R&D) workforce densities one of the highest among Organization for Economic Cooperation and Development (OECD) economies, with roughly 170 researchers per 10,000 people as of 2022. Yet, firms consistently report shortages of applied engineers capable of contributing immediately to industrial systems.[11](#_edn11)

Industrial competitiveness depends not on the number of STEM degrees issued, but rather on the share of graduates capable of effectively supporting production environments. When doctoral graduates enter low-wage or nontechnical employment, the problem is not insufficient education supply but misaligned training incentives and weak industry integration.

# Why Medicine and Engineering Produce Divergent Career Choices

The preference for medicine over engineering reflects rational responses to predictable financial signals rather than cultural bias. Medical careers in Korea combine licensing protection, restricted entry, and highly stable lifetime earnings trajectories. Engineering careers, by contrast, involve greater exposure to global labor competition, slower early-career wage growth, and weaker institutional signaling of long-term income stability. These structural differences shape student decisions in predictable ways.

Medical education operates under strict enrollment quotas that limit annual intake and sustain earnings premiums across the profession. For decades, Korea’s medical school quota remained fixed at approximately 3,058 seats annually, effectively restricting entry into the profession and preserving scarcity-based income advantages.[12](#_edn12) The result is a labor market characterized by strong wage stability and low unemployment risk among physicians relative to most other professional occupations.

> Medical careers in Korea combine licensing protection, restricted entry, and highly stable lifetime earnings trajectories. Engineering careers involve greater exposure to global labor competition, slower early-career wage growth, and weaker institutional signaling of long-term income stability.

Financial return patterns reinforce these structural protections. Income data from Korea show a substantial earnings premium for physicians relative to engineering and technical occupations.

OECD data show that Korean physicians rank among the highest-paid in the OECD relative to average workers: In 2021, their earnings ranged from 2.1 to 6.8 times the average wage, depending on physician category.[13](#_edn13) National health workforce data separately report that physicians in Korea earned an average annual income of approximately 269 million KRW in 2021, far above the earnings levels of science and engineering doctorate holders.[14](#_edn14)

In contrast, earnings trajectories for STEM professionals are markedly less favorable, particularly within Korea’s domestic labor market. According to a Bank of Korea survey of science and engineering master’s and doctoral-level professionals, average annual earnings for domestic STEM professionals reach approximately 97.4 million KRW ($64,700) 10 years after obtaining their final degree.[15](#_edn15) Separate data show that doctoral degree holders in natural sciences and engineering earned average annual incomes of 98.69 million KRW ($65,600) and 99.44 million KRW ($66,100), respectively, in 2021—less than half of average physician earnings. Between 2016 and 2021, average annual wage growth was 3.5 percent in natural sciences, 2.0 percent in engineering, and 4.4 percent for physicians. This level remains substantially below physician income and grows only gradually with years of service.

**Figure 3: Average labor income of science and engineering doctorates and physicians, 2016–2021 (10,000 KRW)[16](#_edn16)**

![image](https://itif-publications-production.s3.amazonaws.com/2026-korea-stem-challenge%20v10%20final%20HTML_files/image004.png)

The divergence begins early in careers: in the year of degree completion, domestic STEM professionals earn approximately 58 million KRW ($38,500), whereas those working overseas earn approximately 171 million KRW ($113,800), equivalent to more than twice domestic earnings. Domestic STEM earnings typically exceed 100 million KRW ($66,400) only after approximately 14 years, with peak average earnings reaching approximately 118.86 million KRW ($78,900) after 20 years. These patterns contrast sharply with the medical profession, where regulated entry and licensing constraints sustain high- and stable-income trajectories from early career stages, reinforcing strong financial incentives for students to prioritize medicine over engineering and other STEM pathways.

**Figure 4: Average starting annual salary of newly employed graduates in science and engineering fields by degree level, 2023 (10,000 KRW)[17](#_edn17)**

![image](https://itif-publications-production.s3.amazonaws.com/2026-korea-stem-challenge%20v10%20final%20HTML_files/image005.png)

The United States offers a useful comparison. Wage premiums for science and technology occupations in Korea remain relatively low compared with those in advanced economies, particularly the United States. In Korea, the median labor income of science and engineering doctorate holders ranges between 90 million and 100 million KRW ($59,800–$66,400), which is approximately 1.7 to 2 times lower than in the United States, to which many high-skilled Korean professionals relocate.

**Figure 5: Salary ratio for specialist doctors vs. the national average wage, 2021 (or nearest year)**

![image](https://itif-publications-production.s3.amazonaws.com/2026-korea-stem-challenge%20v10%20final%20HTML_files/image006.png)

In the United States, engineering careers benefit from strong labor market demand, flexible compensation models, and early-career wage acceleration tied to technical performance. The U.S. system also provides stronger pathways for entrepreneurial and creative experimentation, supported by deep venture capital markets, university spin-off ecosystems, and relatively low barriers to firm formation.[18](#_edn18) Korea’s system remains more rigid, with slower wage progression, weaker institutional linkage between training and industry deployment, and fewer structured pathways for engineers to transition into start-ups or independent technical ventures.[19](#_edn19) As long as medicine retains structural protections and engineering remains exposed to labor market volatility without compensating returns, students will rationally choose medicine over engineering. Policy narratives alone will not change this behavior. Incentives will.

# Policy Framework: Align Incentives Toward Engineering Deployability

Policy reform should focus on incentive realignment rather than enrollment expansion alone. Five actions would generate immediate structural effects across Korea’s STEM pipeline, especially at the graduate level where deployability outcomes are determined.

**First, the National Assembly should authorize differentiated tuition frameworks for high-return professional programs such as medicine.** Current tuition freezes compress educational price signals across fields with dramatically different private returns. Medical graduates consistently enter occupations with protected licensing regimes and high lifetime earnings, yet tuition remains constrained under uniform ceilings. There is no logic behind using taxpayer dollars to subsidize the education of individuals with high expected lifetime earnings. If any aid is to be given, it should be student loans with market-based interest rates for repayment.

Allowing controlled tuition differentiation with higher tuition for medicine and lower for STEM within defined limits would align private educational returns with national workforce priorities. Several OECD countries allow program-level tuition flexibility to reflect labor market outcomes, particularly in professional education sectors where private returns are demonstrably higher.

**Second, the Ministry of Education** **should allocate increased tuition payments from medical programs to reinvestment into engineering and computing education, including computer science, software engineering, and AI-related graduate training capacity.** Incremental tuition revenue should be legally earmarked for engineering fellowships, especially for low-income students, laboratory modernization, and applied training programs in sectors facing measurable labor shortages, including AI, semiconductors, aerospace systems, robotics, and advanced software engineering. The reinvestment mechanism must be transparent and rule based, ensuring that redistributed funds are not absorbed into general university budgets but instead directly increase deployable technical capacity.

**Third, the Ministry of Economy and Finance should establish a protected STEM reinvestment fund that prioritizes innovative institutional and pedagogical models of STEM training.** This fund should finance doctoral fellowships, applied research infrastructure, and university–industry partnerships designed to produce graduates who transition directly into industrial roles. Korea’s graduate education model remains heavily academic in structure, while many advanced economies increasingly organize doctoral training around industry deployment pathways.

Denmark’s Industrial PhD program provides a relevant reference model. Under this system, doctoral candidates are jointly employed by companies and universities, conducting research tied directly to commercial and industrial problems. Evaluations by the Danish Agency for Higher Education and Science show that Industrial PhD participants demonstrate significantly stronger employment integration and higher private-sector retention rates compared with traditional academic doctoral graduates.

### Denmark’s Industrial PhD Model: Embedding Graduate Training Inside Production Systems

One of the most instructive international examples of aligning graduate education with industrial capability is Denmark’s Industrial PhD model. Rather than treating doctoral education as a purely academic exercise, Denmark redesigned its doctoral system to function as a workforce deployment instrument tied directly to firm-level innovation.

Under the Industrial PhD program, doctoral candidates are formally employed by a private-sector company while simultaneously being enrolled in a university doctoral program. Research projects are jointly defined by firms and academic supervisors and are structured to address commercially relevant technological problems. Public funding partially subsidizes the doctoral salary, while firms remain responsible for embedding candidates within operational research environments. This design shifts doctoral education away from disciplinary abstraction and toward industrial problem-solving capacity.

The labor-market outcomes associated with the model are notable. Industrial PhD graduates exhibit exceptionally high employment rates, typically exceeding 95 percent, and demonstrate stronger attachment to private-sector employment compared with conventional doctoral graduates.[20](#_edn20) They also command higher average earnings than do traditional PhD holders, reflecting both the applied nature of their research training and the accumulation of firm-specific experience during doctoral study. These outcomes illustrate the central policy insight of the model: doctoral education can serve as a workforce formation mechanism when research training is embedded inside production systems rather than separated from them.[21](#_edn21)

Equally important is the institutional structure that enables the system to function at scale. Denmark’s program operates through formalized collaboration agreements among universities, firms, and the national government. Firms participate not as peripheral sponsors but as co-designers of research agendas. Universities maintain academic oversight and credentialing authority. Government funding mechanisms ensure that participation remains financially viable for small and medium-sized firms as well as large enterprises. The resulting institutional configuration reduces the traditional divide between academic training and industrial employment pathways.

The relevance of this model extends beyond doctoral education alone. It demonstrates how advanced economies can convert graduate education into a tool of industrial competitiveness by restructuring incentives rather than expanding enrollment alone. Countries that treat graduate education as an integrated component of industrial strategy tend to produce researchers who transition more rapidly into productive technological roles and remain embedded in innovation-intensive sectors over time.

This insight is reinforced by cross-national education and workforce data. Across OECD economies, graduates with advanced degrees consistently demonstrate higher employment rates and earnings than do those with lower levels of educational attainment, yet significant variation persists across fields of study and institutional structures.[22](#_edn22) Systems that strengthen the connection between higher education and labor-market outcomes tend to produce stronger employment outcomes and more efficient transitions into skilled occupations.

For Korea, the Danish experience offers a concrete institutional template rather than an abstract policy aspiration. The central lesson is not simply to expand doctoral education, but to redesign graduate training around production-linked research. Pilot programs modeled on the Industrial PhD structure could be introduced in sectors facing persistent technical workforce shortages, including AI, semiconductors, robotics, and aerospace systems. Over time, scaling such programs could shift graduate education from an academic credential pipeline into a strategic workforce deployment mechanism aligned with national industrial priorities.

In addition to doctoral-level reforms, Korea should pilot institutional models that embed project-based and industry-driven learning earlier in the education pipeline. Institutions such as Olin College of Engineering in the United States integrate engineering education with multidisciplinary design, business entrepreneurship, and sustained industry collaboration. Students complete real-world technical projects as part of their core curriculums, preparing them to transition directly into engineering and technology roles. Similarly, Kettering University in Michigan provides immersive cooperative education programs in which students alternate between academic study and paid industry placements across multiple engineering disciplines. Korea should adopt these institutional principles by establishing at least one national pilot university or program that integrates engineering, computing, and industry deployment as a unified training model.

### Olin College Model: Project-Based Engineering Training Linked to Real Production Tasks

Traditional engineering programs often separate theory from real production work. Students typically complete lectures and laboratory exercises before encountering real-world constraints such as cost, materials, manufacturability, and system integration. The model used at Olin College of Engineering shows how embedding production-style design projects throughout the curriculum can shorten the transition from graduation to effective workplace performance.[23](#_edn23)

Founded in 1997, Olin College built its curriculum around required design projects in every year of study. Students work in teams to design, build, and test functional engineering systems rather than complete isolated technical exercises. Projects require students to manage real engineering constraints such as component costs, physical tolerances, safety requirements, and user performance targets. Most courses include hands-on deliverables, and the final year requires a capstone project completed for an external client or industry partner.[24](#_edn24)

By graduation, Olin students complete multiple full-cycle engineering projects that involve concept design, prototyping, testing, debugging, and delivery. This repeated exposure to production-style tasks improves familiarity with engineering workflows and reduces the time required for graduates to operate effectively inside engineering teams. Engineering education research finds that students trained in sustained design-build-test environments demonstrate stronger practical problem-solving ability and faster workplace integration than do those trained primarily through lecture-based instruction.[25](#_edn25)

The institutional design supporting this model is equally important. Faculty supervise project execution rather than rely solely on lectures. Laboratories function as active build spaces where students fabricate prototypes, test components, and troubleshoot system failures. Industry partners frequently define project goals or provide real-world design constraints. These structural features create training environments that resemble real engineering workplaces rather than classroom simulations.[26](#_edn26)

For Korea, the most transferable lesson is the use of required production-style projects as a core graduation requirement rather than an optional activity. Graduate engineering programs in fields such as semiconductors, robotics, AI systems, and aerospace engineering could adopt structured design-build-test project requirements tied to industry-defined problems. Combined with Industrial PhD-style firm partnerships, this approach would create parallel training channels that expose students to production environments inside both universities and companies.[27](#_edn27)

**Fourth, the Ministry of Education and the Ministry of Science and ICT should convert a defined portion of university funding into outcome-based financing tied explicitly to employment placement in high-quality technical roles.** Funding allocations should be linked to measurable outcomes rather than enrollment levels alone. Metrics should include graduate placement in designated strategic industries, verified completion of industry-linked technical training, and employer-reported workforce readiness indicators. National-level reporting of these outcomes would shift institutional accountability from degree production to deployable capability formation and enable policymakers to identify programs that consistently deliver workforce-ready graduates.

**Fifth, the government should expand English-language graduate programs in priority engineering and applied science fields to increase both domestic and international deployability.** English-language technical instruction is a structural feature of many globally competitive engineering systems, particularly in Northern Europe. Denmark, the Netherlands, and Finland have expanded English-taught engineering programs specifically to attract global talent and integrate domestic graduates into international research and industrial networks. For Korea, expanding English-language graduate education would help improve the global mobility of Korean engineers, strengthen foreign talent retention, and increase participation in multinational R&D ecosystems. This policy should be paired with industry-linked internship requirements conducted in English-speaking technical environments, ensuring that graduates can operate in multinational engineering contexts from the outset of their careers.

These policies would shift institutional incentives from enrollment expansion to deployability performance. Without such realignment, Korea will continue to produce degrees without cultivating needed capability. Countries that treat graduate education as an employment system rather than a credential system consistently generate stronger industrial outcomes. Korea has the institutional capacity to implement this transition, but doing so requires linking financial reform, industrial demand signals, and graduate training architecture into a single coordinated framework.

# Conclusion

Korea’s STEM workforce challenge is not a demographic accident. It is an institutional design problem. Students are not abandoning engineering because they lack patriotism or technical interest. They are responding to predictable incentives that reward stability over innovation risk. Unless those incentives change, engineering shortages will persist regardless of how many degrees are issued.

The policy question is therefore not how to expand the STEM pipeline, but rather how to redesign the financial and institutional signals that determine where talent flows. Countries that align incentives with national industrial priorities produce deployable capability. Countries that fail to do that produce credentials without competitiveness. Korea now faces a choice between those two models.

### Acknowledgments

The authors would like to thank Meghan Ostertag, policy analyst for economic policy at ITIF, Sira Maliphol, assistant professor at Seoul National University. Thank you to those who also spoke on the condition of anonymity. Their inputs were greatly appreciated and helped shape this report.

The authors would also like to thank Randolph Court for his editorial assistance.

Any errors or omissions are the authors’ responsibility alone.

### About the Authors

Dr. Robert D. Atkinson (@RobAtkinsonITIF) founded ITIF and is a senior fellow. His books include *Technology Fears and Scapegoats: 40 Myths About Privacy, Jobs, AI and Today’s Innovation Economy* (Palgrave McMillian, 2024), *Big Is Beautiful: Debunking the Myth of Small Business* (MIT, 2018), *Innovation Economics: The Race for Global Advantage* (Yale, 2012), *Supply-Side Follies: Why Conservative Economics Fails, Liberal Economics Falters, and Innovation Economics Is the Answer* (Rowman Littlefield, 2007), and *The Past and Future of America’s Economy: Long Waves of Innovation That Power Cycles of Growth* (Edward Elgar, 2005). He holds a PhD in city and regional planning from the University of North Carolina, Chapel Hill.

Sejin Kim is a tech policy analyst specializing in AI, blockchain, space, and emerging tech for ITIF’s Center for Korean Innovation and Competitiveness. Drawing on technology journalism experience bridging South Korean and U.S. tech ecosystems, she brings cross-cultural insights into national competitiveness and policy dynamics. Notable publications include “On the Recent Development of Central Bank Digital Currency (CBDC)” (December 2020, listed in Reuters Refinitiv), “WeMix, Web3 Gaming and Ethics” (January 2023), and “2025 Global Tech Trends: 17 of The Trend Revolution is Coming” (November 2024).

### About ITIF

The Information Technology and Innovation Foundation (ITIF) is an independent 501(c)(3) nonprofit, nonpartisan research and educational institute that has been recognized repeatedly as the world’s leading think tank for science and technology policy. Its mission is to formulate, evaluate, and promote policy solutions that accelerate innovation and boost productivity to spur growth, opportunity, and progress. For more information, visit [itif.org/about](https://itif.org/about/).

# Endnotes

[1](#_ednref1). Korea Chamber of Commerce and Industry (KCCI), “Shortage of Science and Engineering Talent in Korea: Current Status and Policy Recommendations” (K-Growth Series No. 10) (Seoul: Korea Chamber of Commerce and Industry, December 12, 2025), [https://www.korcham.net/nCham/Service/Economy/appl/KcciReportDetail.asp?CHAM_CD=B001&SEQ_NO_C010=20120943774](https://www.korcham.net/nCham/Service/Economy/appl/KcciReportDetail.asp?CHAM_CD=B001&SEQ_NO_C010=20120943774); OECD/Korea Labor Institute, *Artificial Intelligence and the Labour Market in Korea* (Paris: OECD Publishing, 2025), [https://doi.org/10.1787/68ab1a5a-en](https://doi.org/10.1787/68ab1a5a-en).

[2](#_ednref2). OECD data shows substantial variation in private returns to higher education across fields of study, particularly between professional programs such as medicine and engineering. Many OECD countries permit program-level tuition differentiation to reflect differences in expected earnings and labor market outcomes. OECD, *Education at a Glance 2023*, “Chapter B4: Private Returns to Tertiary Education,” [https://www.oecd.org/en/publications/education-at-a-glance_19991487.html](https://www.oecd.org/en/publications/education-at-a-glance_19991487.html); OECD, “Cost-sharing and Tuition Fee Policies in Higher Education,” [https://www.oecd.org/education/skills-beyond-school/centreforeducationalresearchandinnovationceri-cost-sharing.htm](https://www.oecd.org/education/skills-beyond-school/centreforeducationalresearchandinnovationceri-cost-sharing.htm).

[3](#_ednref3). OECD, “Education at a Glance 2023,” documenting variation in private returns across professional education fields and the use of differentiated tuition structures in advanced economies, [https://www.oecd.org/en/publications/education-at-a-glance_19991487.html](https://www.oecd.org/en/publications/education-at-a-glance_19991487.html).

[4](#_ednref4). OECD, *OECD Reviews of Innovation Policy: Korea 2023*, noting the importance of linking educational financing with national innovation capacity and workforce development outcomes, [https://www.oecd.org/en/publications/oecd-reviews-of-innovation-policy-korea-2023_6517d469-en.html](https://www.oecd.org/en/publications/oecd-reviews-of-innovation-policy-korea-2023_6517d469-en.html).

[5](#_ednref5). Innovation Fund Denmark, “Industrial PhD Programme,” [https://innovationsfonden.dk/en/p/industrial-researcher/industrial-phd-private-sector-9](https://innovationsfonden.dk/en/p/industrial-researcher/industrial-phd-private-sector-9).

[6](#_ednref6). OECD, “Work-based Learning and Industry Doctoral Training Models,”. [https://www.oecd.org/education/work-based-learning.htm](https://www.oecd.org/education/work-based-learning.htm).

[7](#_ednref7). Olin College of Engineering, “Academic Program Overview,” [https://www.olin.edu/academics](https://www.olin.edu/academics).

[8](#_ednref8). Ministry of Trade, Industry and Energy (MOTIE) and Korea Institute for Advancement of Technology (KIAT), “2024 Survey on Industrial Technology Workforce Supply and Demand (December 2024),” [https://www.motir.go.kr/kor/article/ATCL3f49a5a8c/169999/view](https://www.motir.go.kr/kor/article/ATCL3f49a5a8c/169999/view); Kim In-ja, “K-Growth Series (10): Current Status of STEM Workforce Shortages and Policy Recommendations,” Korea Institute of S&T Evaluation and Planning (KISTEP), December 12, 2025. [http://www.gycci.or.kr/front/boardlink/boardlinkContentsView.do?boardId=13&contId=20120943774&menuId=5212](http://www.gycci.or.kr/front/boardlink/boardlinkContentsView.do?boardId=13&contId=20120943774&menuId=5212).

[9](#_ednref9). Lee Sang-don (2025), “Declining R&D Talent Threatens Future Technologies. 2025 Seoul Population Forum” (Hosted by The Chosun Ilbo, Nov. 27, 2025; data provided); Kim In-ja, “K-Growth Series (10): Current Status of STEM Workforce Shortages and Policy Recommendations,” Korea Institute of S&T Evaluation and Planning (KISTEP), December 12, 2025, [http://www.gycci.or.kr/front/boardlink/boardlinkContentsView.do?boardId=13&contId=20120943774&menuId=5212](http://www.gycci.or.kr/front/boardlink/boardlinkContentsView.do?boardId=13&contId=20120943774&menuId=5212).

[10](#_ednref10). Korea Research Institute for Vocational Education and Training (KRIVET), “Survey on the Characteristics and Early Labor Market Outcomes of New PhD Graduates (2025),” Table 3-2 showing doctoral field distribution, including engineering (25.8%), natural sciences (12.5%), ICT (5.0%), arts and humanities (16.9%), business, administration, and law (11.5%), and social sciences and journalism (5.2%), [https://www.krivet.re.kr/repository/handle/202405/11302](https://www.krivet.re.kr/repository/handle/202405/11302).

[11](#_ednref11) “South Korea Faces Engineering Talent Crunch as Top Students Flock to Medical Schools,” *The Chosun Daily*, May 8, 2025, [https://www.chosun.com/english/national-en/2025/05/08/SIEC46RLYVAWZCDQ4UG5APKVL4/](https://www.chosun.com/english/national-en/2025/05/08/SIEC46RLYVAWZCDQ4UG5APKVL4/).

[12](#_ednref12). Republic of Korea Ministry of Health and Welfare: Long-standing medical school enrollment quotas have remained fixed at approximately 3,058 seats annually for nearly two decades, shaping supply constraints in physician labor markets, [https://www.reuters.com/world/asia-pacific/south-korea-prepared-freeze-new-medical-student-numbers-minister-says-2025-03-07/](https://www.reuters.com/world/asia-pacific/south-korea-prepared-freeze-new-medical-student-numbers-minister-says-2025-03-07/).

[13](#_ednref13). OECD, “Health at a Glance 2023 OECD Indicators,” accessed March 15, 2026, [https://www.oecd.org/en/publications/health-at-a-glance-2023_7a7afb35-en/full-report/remuneration-of-doctors_00c81ee4.html](https://www.oecd.org/en/publications/health-at-a-glance-2023_7a7afb35-en/full-report/remuneration-of-doctors_00c81ee4.html).

[14](#_ednref14). Ministry of Health and Welfare (Republic of Korea), “Average Income of Physicians and Medical Workforce Statistics,” accessed March 18, 2026, [https://www.mk.co.kr/en/society/10949144](https://www.mk.co.kr/en/society/10949144).

[15](#_ednref15). Dollar conversions use an exchange rate of approximately 1,505 KRW per U.S. dollar; Bank of Korea, “Determinants of Overseas Outflow of Science and Engineering Professionals and Policy Response Directions” (2025.11), [https://www.bok.or.kr/portal/bbs/P0002353/view.do?nttId=10094375&menuNo=200433&programType=newsData&relate=Y&depth=200433](https://www.bok.or.kr/portal/bbs/P0002353/view.do?nttId=10094375&menuNo=200433&programType=newsData&relate=Y&depth=200433).

[16](#_ednref16). For natural sciences and engineering, the term “average labor income” is used, while for physicians and dentists, the term “average wage” is used. Measures differ by occupation category; physician values reflect wage income, while science and engineering values reflect labor income; Korea Institute of Science and Technology Evaluation and Planning (KISTEP), multiple years, Survey on the Training, Utilization, and Compensation of Science and Engineering Workforce, Ministry of Health and Welfare and Korea Health Industry Development Institute (July 2022), Healthcare Workforce Survey.

[17](#_ednref17). Ministry of Education and Korea Educational Development Institute (KEDI), “2023 Higher Education Graduate Employment Statistics Yearbook” (December 2024).

[18](#_ednref18). The United States maintains the world’s largest venture capital ecosystem, providing critical early-stage financing for technical startups and innovation-driven firms. National Venture Capital Association (NVCA), “2024 Yearbook,” [https://nvca.org/research/nvca-yearbook/](https://nvca.org/research/nvca-yearbook/); OECD, “Entrepreneurship at a Glance 2023,” documenting cross-country differences in venture financing and startup formation, [https://www.oecd.org/en/publications/entrepreneurship-at-a-glance_23065265.html](https://www.oecd.org/en/publications/entrepreneurship-at-a-glance_23065265.html); U.S. universities maintain highly developed commercialization systems linking research to startup creation. Technology transfer offices and licensing programs generate thousands of startup firms annually. Association of University Technology Managers (AUTM), “AUTM Licensing Activity Survey 2023,” [https://autm.net/surveys-and-tools/surveys/licensing-activity-survey](https://autm.net/surveys-and-tools/surveys/licensing-activity-survey); U.S. Government Accountability Office (GAO), “Technology Transfer: Federal Research Commercialization Outcomes,” [https://www.gao.gov/products/gao-21-52](https://www.gao.gov/products/gao-21-52); Entrepreneurship participation rates in the United States remain among the highest in advanced economies, reflecting strong institutional support for firm formation and risk-taking careers. Global Entrepreneurship Monitor (GEM), “Global Report 2023/2024,” [https://www.gemconsortium.org/report](https://www.gemconsortium.org/report).

[19](#_ednref19). Despite strong R&D intensity, Korea continues to face institutional constraints in translating research outputs into industrial deployment and startup formation. OECD, “OECD Reviews of Innovation Policy: Korea 2023,” [https://www.oecd.org/en/publications/oecd-reviews-of-innovation-policy-korea-2023_6517d469-en.html](https://www.oecd.org/en/publications/oecd-reviews-of-innovation-policy-korea-2023_6517d469-en.html).

[20](#_ednref20). Danish Agency for Science, Technology and Innovation, “The Effect of the Industrial PhD Programme on Employment and Income” (Copenhagen: Government of Denmark), documenting employment rates above 95 percent among Industrial PhD graduates and higher average earnings relative to conventional doctoral graduates, [https://innovationsfonden.dk/sites/default/files/2018-11/the_effect_of_the_industrial_phd_programme_on_employment_and_income_v4.pdf](https://innovationsfonden.dk/sites/default/files/2018-11/the_effect_of_the_industrial_phd_programme_on_employment_and_income_v4.pdf).

[21](#_ednref21). Danish Agency for Science, Technology and Innovation, “Industrial PhD Programme Overview” (Copenhagen: Government of Denmark), describing the joint firm–university structure and private-sector employment pathways associated with the Industrial PhD model, [https://aca-secretariat.be/newsletter/the-effect-of-the-industrial-phd-programme-on-employment-and-income](https://aca-secretariat.be/newsletter/the-effect-of-the-industrial-phd-programme-on-employment-and-income).

[22](#_ednref22). OECD, *Education at a Glance 2025: OECD Indicators* (Paris: OECD Publishing, 2025), documenting employment and earnings advantages associated with higher levels of tertiary education across OECD economies, [https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/09/education-at-a-glance-2025-country-notes_9749f4ff/denmark_9851c39b/4ec12dea-en.pdf.](https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/09/education-at-a-glance-2025-country-notes_9749f4ff/denmark_9851c39b/4ec12dea-en.pdf.)

[23](#_ednref23). Olin College of Engineering, “About Olin: Curriculum and Academic Programs” (Needham, MA: Olin College of Engineering), accessed 2026, [https://www.olin.edu/about](https://www.olin.edu/about).

[24](#_ednref24). National Academy of Engineering, “Infusing Real-World Experiences into Engineering Education” (Washington, D.C.: National Academies Press, 2012), [https://nap.nationalacademies.org/catalog/13400/infusing-real-world-experiences-into-engineering-education](https://nap.nationalacademies.org/catalog/13400/infusing-real-world-experiences-into-engineering-education).

[25](#_ednref25). Edward F. Crawley et al., *Rethinking Engineering Education: The CDIO Approach*, 2nd ed. (Cham, Switzerland: Springer, 2014), [https://dut.udn.vn/Files/admin/files/CDIO/TailieuHoithao/The%20CDIO%20Approach%20-%20Rethinking%20Engineering%20Education.pdf](https://dut.udn.vn/Files/admin/files/CDIO/TailieuHoithao/The%20CDIO%20Approach%20-%20Rethinking%20Engineering%20Education.pdf).

[26](#_ednref26). Ann F. McKenna, “Educating Engineers: Designing for the Future of the Field,” by Sheri D. Sheppard, Kelly Macatangay, Anne Colby, and William M. Sullivan, *The Journal of Higher Education 81, no. 6* (2010): 717–19. [http://www.jstor.org/stable/40929576](http://www.jstor.org/stable/40929576).

[27](#_ednref27). Danish Agency for Higher Education and Science, “Industrial PhD Programme Overview” (Copenhagen: Ministry of Higher Education and Science), accessed 2026, [https://ufm.dk/en/research-and-innovation/funding-programmes-for-research-and-innovation/industrial-phd](https://ufm.dk/en/research-and-innovation/funding-programmes-for-research-and-innovation/industrial-phd).

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*Source: Information Technology & Innovation Foundation (ITIF)*
*URL: https://itif.org/publications/2026/06/08/koreas-stem-talent-challenge-fixing-incentives-for-deployability/*